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The office of state Comptroller Tom DiNapoli on Friday morning released its audit of the troubled Saratoga Housing Authority. The Times Union has reported and editorialized extensively on the questions that have arisen around the extremely generous five-year contract given to SHA Executive Director Ed Spychalski, who made almost $145,000 in his most recent year of service. The OSC concluded that was a rich salary indeed, and one that’s structured in such a way that taxpayers could be out $580,000 if the board decided to terminate him.

The audit identified $11,688 in questionable travel costs incurred by Spychalski and others built up over the course of five trips in 2010-2012, including a trip to a conference in Phoenix that rather mysteriously required Spychalski and his wife to fly into Las Vegas, rent a car on the taxpayers’ dime, and then drive the five and a half hours each way. Uh, why?

The Director stated that they flew into Las Vegas because they could not get a direct flight into Phoenix. However, we found that there was a flight purchased by the Director directly into Phoenix on January 7. This ticket was canceled, and a different flight into Las Vegas was arranged for a day earlier.

Vegas, baby! The audit rapped the board in general for poor oversight of Spychalski and authority spending, including a vehicle service contract with a company owned by Spychalski’s brother, and notes that the authority waited five months to adequately address a bedbug infestation — which, believe it or not, is one of those things that gets worse if you fail to address it.

Here’s the release from OSC, followed by the full audit:

Auditors found lax spending controls at the Saratoga Housing Authority (SHA), according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Taxpayers and tenants of the Housing Authority shouldn’t have to question if their money is being used appropriately,” said DiNapoli. “Officials should immediately address the financial risks uncovered in this audit and commit to improving the tone at the top as they move forward.”

After public allegations were made surrounding potential financial irregularities and spending practices on salaries, travel and business expenses, DiNapoli’s office was asked by the mayor of Saratoga Springs to conduct an audit.

Auditors found the SHA board did not compensate its executive director – whose 2011-12 salary was $144,921 – in accordance with its personnel policy. By comparison, the salaries of housing authority directors in Plattsburgh, Troy, Schenectady and Albany ranged from $96,000 to $139,000.

Further, the authority lacked appropriate internal controls for conference attendance and the process of approving travel claims prior to payment. These lax controls resulted in the payment of nearly $12,000 in questionable travel costs on out-of-state trips.

DiNapoli’s report also noted the authority failed to assess the extent of a widespread bed bug infestation in one of its apartment complexes. Auditors found the authority was alerted to the bed bug problem at Stonequist Apartments in September 2011, but did not engage the services of a professional exterminator until February 2012.

Additional audit findings include:

Insufficient control over payroll increased the chance that errors or irregularities could occur and not be detected and corrected in a timely manner.

SHA violated its ethics policy when using a business owned by the executive director’s brother to service its vehicles.

The executive director was given a five-year contract with an annual automatic, one-year extension which becomes effective unless the SHA board gives the director timely notice that the agreement is terminated. Under this arrangement, if the director fails to perform his duties satisfactorily, the board is only permitted to terminate the one-year extension of his contract. The authority will still be obligated to pay the remainder of his salary, approximately $580,000.

Obtain reimbursement from authority officials and employees for any questionable travel costs identified in this report;

Cease approving contract language that prohibits the board from dismissing an unsatisfactory employee without incurring a substantial financial burden or that establishes default mechanisms that result in automatic contract extensions or salary increases;

Audit and approve all claims prior to payment and ensure that every claim is sufficiently itemized and contains necessary supporting documentation to ensure that it is a proper authority charge and that the goods and/or services have been received;

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